The Process for Issuing Shares Is That

question 74

Multiple Choice

The process for issuing shares is that:

• A) They are offered for sale, allotments are received and an assignment made. Monies received on allotment must be held in trust until the assignment is made.
• B) They are offered for sale, applications are received and an allotment made. Monies received on application must be held in trust until the allotment is made.
• C) Applications are received for the issue of shares and an offer of shares is made. Applicants contribute capital that is returned to them if their application is unsuccessful when the shares are assigned.
• D) A notice of intention to purchase shares is registered with the stock exchange, which the company receives. The company then offers shares. The applicant may then be allotted shares and at that point must make the cash contribution.

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Definitions:

Dividend Payout Ratio

The percentage of earnings paid to shareholders in the form of dividends, calculated by dividing total dividends by net income.

Earnings Per Share

A financial metric that measures a company's profitability by dividing its net income by the number of outstanding shares of its common stock.

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted; it contributes towards covering fixed costs and generating profit.

Gross Margin Percentage

A financial metric that represents the percentage difference between sales revenue and the cost of goods sold, divided by sales revenue, showcasing the efficiency of a company in managing its production costs.